Appendix 4G Key to Disclosures Corporate Governance ...simondsgroup.com.au/images/Section/Media/135/size2/... · Date: 31 October 2016 Name of Director or Secretary authorising lodgement:

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Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:

Simonds Group Limited

ABN / ARBN: Financial year ended:

143 843 801 30 June 2016

Our corporate governance statement2 for the above period above can be found at:3

☐ These pages of our annual report:

☒ This URL on our website: http://simondsgroup.com.au/corporateGovernance

The Corporate Governance Statement is accurate and up to date as at 30 September 2016 and has been approved by the board. The annexure includes a key to where our corporate governance disclosures can be located.

Date: 31 October 2016

Name of Director or Secretary authorising lodgement:

Elizabeth Hourigan

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the

extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period. 3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s

corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection.

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ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed …

We have NOT followed the recommendation in full for the whole

of the period above. We have disclosed …4

PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1 A listed entity should disclose:

(a) the respective roles and responsibilities of its board and management; and

(b) those matters expressly reserved to the board and those delegated to management.

… the fact that we follow this recommendation:

☒ in our Corporate Governance Statement OR

☐ at [insert location]

… and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management):

☒ at http://simondsgroup.com.au/corporateGovernance

☐ an explanation why that is so in our Corporate Governance

Statement OR

☐ we are an externally managed entity and this recommendation

is therefore not applicable

1.2 A listed entity should:

(a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and

(b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.





Statement OR



1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.





Statement OR



1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.





Statement OR



4 If you have followed all of the Council’s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

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(a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

(b) disclose that policy or a summary of it; and

(c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either:

(1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or

(2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

… the fact that we have a diversity policy that complies with paragraph (a):



… and a copy of our diversity policy or a summary of it:


… and the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with our diversity policy and our progress towards achieving them:

☐ in our Corporate Governance Statement OR


… and the information referred to in paragraphs (c)(1) or (2):




Statement OR




(a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

… the evaluation process referred to in paragraph (a):



… and the information referred to in paragraph (b):




Statement OR




(a) have and disclose a process for periodically evaluating the performance of its senior executives; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

… the evaluation process referred to in paragraph (a):



… and the information referred to in paragraph (b):




Statement OR



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PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE

2.1 The board of a listed entity should:

(a) have a nomination committee which:

(1) has at least three members, a majority of whom are independent directors; and

(2) is chaired by an independent director,

and disclose:

(3) the charter of the committee;

(4) the members of the committee; and

(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

[If the entity complies with paragraph (a):]

… the fact that we have a nomination committee that complies with paragraphs (1) and (2):



… and a copy of the charter of the committee:


… and the information referred to in paragraphs (4) and (5):



[If the entity complies with paragraph (b):]

… the fact that we do not have a nomination committee and the processes we employ to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively:



☒ an explanation why that is so in our Corporate Governance

Statement OR



2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

… our board skills matrix:




Statement OR



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(a) the names of the directors considered by the board to be independent directors;

(b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and

(c) the length of service of each director.

… the names of the directors considered by the board to be independent directors:



… and, where applicable, the information referred to in paragraph (b):



… and the length of service of each director:




Statement

2.4 A majority of the board of a listed entity should be independent directors.





Statement OR



2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.





Statement OR



2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.





Statement OR



PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY


(a) have a code of conduct for its directors, senior executives and employees; and

(b) disclose that code or a summary of it.

… our code of conduct or a summary of it:




Statement

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PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING


(a) have an audit committee which:

(1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and

(2) is chaired by an independent director, who is not the chair of the board,

and disclose:


(4) the relevant qualifications and experience of the members of the committee; and

(5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

(b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.


… the fact that we have an audit committee that complies with paragraphs (1) and (2):









… the fact that we do not have an audit committee and the processes we employ that independently verify and safeguard the integrity of our corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner:




Statement

4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.





Statement

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4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.





Statement OR

☐ we are an externally managed entity that does not hold an

annual general meeting and this recommendation is therefore not applicable

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE


(a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and

(b) disclose that policy or a summary of it.

… our continuous disclosure compliance policy or a summary of it:




Statement

PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS

6.1 A listed entity should provide information about itself and its governance to investors via its website.

… information about us and our governance on our website:



Statement

6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.





Statement

6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

… our policies and processes for facilitating and encouraging participation at meetings of security holders:




Statement OR

☐ we are an externally managed entity that does not hold

periodic meetings of security holders and this recommendation is therefore not applicable

6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.





Statement

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PRINCIPLE 7 – RECOGNISE AND MANAGE RISK


(a) have a committee or committees to oversee risk, each of which:



and disclose:




(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.


… the fact that we have a committee or committees to oversee risk that comply with paragraphs (1) and (2):









… the fact that we do not have a risk committee or committees that satisfy (a) and the processes we employ for overseeing our risk management framework:




Statement

7.2 The board or a committee of the board should:

(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and

(b) disclose, in relation to each reporting period, whether such a review has taken place.

… the fact that board or a committee of the board reviews the entity’s risk management framework at least annually to satisfy itself that it continues to be sound:



… and that such a review has taken place in the reporting period covered by this Appendix 4G:




Statement

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(a) if it has an internal audit function, how the function is structured and what role it performs; or

(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.


… how our internal audit function is structured and what role it performs:




… the fact that we do not have an internal audit function and the processes we employ for evaluating and continually improving the effectiveness of our risk management and internal control processes:




Statement

7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

… whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks:


☒ in the annual report, at http://simondsgroup.com.au/reports


Statement

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PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY


(a) have a remuneration committee which:



and disclose:




(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.


… the fact that we have a remuneration committee that complies with paragraphs (1) and (2):









… the fact that we do not have a remuneration committee and the processes we employ for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive:




Statement OR

☐ we are an externally managed entity and this recommendation is

therefore not applicable

8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

… separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives:


☒ in the annual report, at http://simondsgroup.com.au/reports


Statement OR



8.3 A listed entity which has an equity-based remuneration scheme should:

(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and

(b) disclose that policy or a summary of it.

… our policy on this issue or a summary of it:




Statement OR

☐ w e do not have an equity-based remuneration scheme and this

recommendation is therefore not applicable OR



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ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES

- Alternative to Recommendation 1.1 for externally managed listed entities:

The responsible entity of an externally managed listed entity should disclose:

(a) the arrangements between the responsible entity and the listed entity for managing the affairs of the listed entity;

(b) the role and responsibility of the board of the responsible entity for overseeing those arrangements.

… the information referred to in paragraphs (a) and (b):




Statement

- Alternative to Recommendations 8.1, 8.2 and 8.3 for externally managed listed entities:

An externally managed listed entity should clearly disclose the terms governing the remuneration of the manager.

… the terms governing our remuneration as manager of the entity:




Statement

1

30 September 2016

Corporate Governance Statement FY2016

For the 2016 financial year, Simonds Group Limited has complied with all of the ASX Corporate Governance

Council’s Corporate Governance Principles and Recommendations, 3rd edition, other than principles 2.1, 2.4,

2.5, 4.1 and 8.1. Details are set out below.

The Board of Simonds Group Limited has approved this corporate governance statement.

Principle 1 – Lay solid foundations for management and oversight

Recommendation 1.1 – Roles and responsibilities of the Board

The Board has adopted a written Charter to provide a framework for the effective operation of the Board. The

Charter outlines the Board composition, its role and responsibilities, relationship with management and

delegation of authority to Board committees and management. The Charter may be viewed in full at

simondsgroup.com.au under the heading ‘About us’.

The Board Charter outlines:

The roles of the Board, the Chairperson, the Chief Executive Officer (CEO) and the Company Secretary.

The guidelines for Board composition, including the processes around Director appointments and

Board nominations.

The general and specific responsibilities of the Board.

Responsibility for the day to day management and administration of the company is delegated by the

Board to the CEO. The CEO is responsible for the management team and employees of the company.

Recommendation 1.2 – Perform appropriate checks on Directors before appointment and provide all

relevant information for election of Directors

The Board Charter outlines the guidance for appointment of directors. Prior to appointing a director or

putting forward a candidate for election as a director, the Board must:

Undertake appropriate checks; and

Provide shareholders with all material information in the Board’s possession relevant to a decision on

whether or not to elect or re-elect a director.

Recommendation 1.3 – Written contracts of appointment

As outlined in the Board Charter, the company must have a written agreement with each director and senior

executive which outlines the terms of appointment. Each director and senior executive has been appointed by

way of formal written agreement setting out the terms of their appointment, including role, responsibilities

and remuneration.

2

Recommendation 1.4 – Company Secretary

As stated in the Board Charter, each director is able to communicate directly with the Company Secretary and

vice versa. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters

to do with the proper functioning of the Board.

Recommendation 1.5 - Diversity

The Company recognises that a diverse and talented workforce is a competitive advantage and that the

Company’s success is the result of the quality and skills of its people. The Company has established and

implemented a Diversity Policy which is overseen by the Board and may be viewed in full at

simondsgroup.com.au. The Board is responsible for developing measurable objectives for achieving gender

diversity.

Formal measureable objectives for diversity were approved by the Board in September 2015. A summary of

these objectives can be found at simondsgroup.com.au. As at the balance sheet date the percentage of

women at each of the following levels within Simonds Group Limited was:

Level As at 30 June 2015 As at 30 June 2016

Board (including Managing Director and CEO) 17% 20%

Key Management Personnel(1) 10% 14%

All employees 49% 51%

(1) Key Management Personnel includes Board of Directors.

Recommendation 1.6 – Board performance evaluation

Due to the current size of the Company and its level of activity, the Board is responsible for the evaluation of

its performance and the performance of individual directors. This review is conducted on an annual basis and

if deemed necessary this internal review will be facilitated by an independent third party.

An internal review was conducted during March 2016 as a result of the appointment of Matthew Chun as CEO

and Managing Director. The Board has concluded that as a result of this appointment, a skills deficiency exists

at Non-executive Director level with reference to audit experience.

The Board is endeavouring to address this skills gap by appointing an independent Non-Executive Director

with the required skills, whilst also addressing complementary diversity targets.

Recommendation 1.7 – Management reviews

Simonds Group has an annual performance review process for all employees. As outlined in the Board

Charter, the CEO is responsible for the performance evaluation of senior executives. The Nomination and

Remuneration Committee is responsible for reviewing the performance targets for senior management.

Since his appointment as CEO in April 2016, Matthew Chun has undertaken a group wide organisational

review, including of the structure of the executive teams and performance of senior executives.

3

Principle 2 – Structure the Board to add value

Recommendation 2.1 – Nomination committee

The Board has established a Remuneration and Nominations Committee, and adopted a written Charter that

sets out the role and objectives, responsibilities and functions of the Committee. The Charter may be viewed

in full at simondsgroup.com.au under the heading ‘About us’.

Membership of the Nomination and Remuneration Committee currently consists of:

Name Independence

Leon Gorr

Chair and Non-executive Director (appointed to Chair on 21 July 2016)

Independent

Susan Oliver

Non-executive Director (Chair until 21 July 2016)

Independent

Rhett Simonds

Non-executive Director (appointed a Committee member on 21 July 2016)

Non-independent

The Nomination and Remuneration Committee met 5 times during the year ended 30 June 2016. All

members of the Committee attended all of those meetings except Leon Gorr, who attended four of the five

meetings.

As currently comprised, the Committee satisfies principle 2.1 but was not in compliance between 1 April and

21 July 2016. Matthew Chun was a member of the Committee until his appointment as CEO on 1 April 2016

at which time he resigned from the Committee. Susan Oliver resigned as Chair and Leon Gorr was appointed

Chair and Rhett Simonds appointed a member of the Committee on 21 July 2016. In the meantime, the

Committee did not meet and the Board assumed its duties.

Recommendation 2.2 – Board skills

The experience and expertise relevant to the position of Director held by each Director in office at the date of

the annual report is included in the Directors’ Report. See also Recommendation 1.6.

The Board skills matrix set out below describes the skills and experience currently represented on the Board:

Audit

Business strategy and risk management exposure and experience

Risk oversight/management expertise

Environmental/sustainability/corporate responsibility

Extensive knowledge and experience of Company's business industry:

o Volume housing

o Construction industry

o Land development

4

o RTO, related training and educational services and compliance exposure or experience

Legal and corporate law experience

Governmental or geographical experience:

o New South Wales

o South Australia

o Queensland

o Victoria

o Western Australia

Financial literacy

IT / Digital strategy

Marketing/marketing-related technology

Mergers and acquisitions

Recommendation 2.3 – Board structure and term in office

The term in office held by each director as at 30 June 2016 and independence status is as follows:

Name Independence Term

Vallence Gary Simonds

Chairman, Non-executive Director

Non-independent 6 years 1 month

Matthew Chun

Managing Director and CEO

Executive, Non-independent 1 year 7 months

Leon Gorr

Non-executive Director

Independent 1 year 7 months

Susan Oliver

Deputy Chair and Non-executive Director

Independent 1 year 7 months

Rhett Simonds


Non-independent 2 months

Recommendations 2.4 and 2.5 – Director independence

Recommendations 2.4 and 2.5 of the ASX Corporate Governance Principles and Recommendations

recommend that the Board comprise a majority of directors who are independent, and an independent

Chairperson.

The Board, as currently composed, does not comply with Recommendation 2.4 or 2.5. With the appointment

of Matthew Chun as Managing Director and CEO in March 2016, the Board has undertaken a search process

to identify suitable candidates as independent Non-executive Directors. That process is ongoing.

5

With regard to Recommendation 2.5, as previously noted, Vallence Gary Simonds established the Company in

1949 and remains a substantial shareholder of the Simonds Group. His in-depth industry experience, gained

over a career spanning more than 65 years in the Australian building industry is considered to be

complementary to the skillset of the current Board. He is currently the Chairman of the Board and has been a

Director of Simonds Group Limited (previously Simonds Homes Holdings Pty Ltd) since May 2010.

Recommendation 2.6 – Director development

The Nominations and Remuneration Committee is responsible for designing induction and ongoing training

and education programs for the Board to ensure the Directors develop and maintain the skills and knowledge

needed to perform their role as directors effectively.

Principle 3 – Act ethically and responsibly

Recommendation 3.1 – Code of conduct

The Company has adopted a written Code of Conduct which applies to all staff members of the Company,

including directors, executives and employees. The objective of this Code is to ensure that all staff at the

Company observe the highest standards of ethics, integrity and behaviour.

The Code may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Principle 4 – Safeguard integrity in corporate reporting

Recommendation 4.1 – Audit and Risk Management Committee

The Board has established an Audit and Risk Management Committee, and adopted a written Charter that

outlines the role and objectives, membership and structure and responsibilities and functions of the

committee. The Charter may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Membership of the Audit and Risk Management Committee currently consists of:

Name Independence

Susan Oliver

Chair and Non-executive Director (appointed to Chair on 21 July 2016)

Independent

Leon Gorr


Independent

Vallance Gary Simonds

Non-executive Director (appointed as a member on 21 July 2016)

Non-independent

6

The Audit and Risk Management Committee met 4 times during the year ended 30 June 2016. All of the

members attended all of those meetings except Susan Oliver, who attended 3 of the 4 meetings.

As currently comprised, the Committee satisfies principle 4.1 but was not in compliance between 1 April and

21 July 2016. Matthew Chun was a member and Chair of the Audit and Risk Committee until his appointment

as CEO on 1 April 2016 at which time he resigned from the Committee. Susan Oliver was appointed Chair and

Gary Simonds appointed a member of the Committee on 21 July 2016. In the meantime, the Committee did

not meet and the Board assumed its duties.

Recommendation 4.2 – CEO and CFO assurance

In accordance with Recommendation 4.2, the Board received assurance from the Chief Executive Officer and

the Chief Financial Officer that the declaration provided in accordance with section 295A of the Corporations

Act is founded on a sound system of risk management and internal control and that the system is operating

effectively in all material respects.

Recommendation 4.3 – External auditor available at annual general meeting (AGM)

The Company’s external auditor attends each AGM and is available to attend to answer shareholder questions

about the audit.

Principle 5 – Make timely and balanced disclosure

Recommendation 5.1 – Disclosure policy

The Company has established a Continuous Disclosure & Communications Strategy Policy which establishes

policies and procedures designed to ensure compliance with its continuous disclosure requirements under the

Listing Rules and the Corporations Act 2001 (Cth).

The Policy sets out the standards, protocols and the detailed requirements expected of all directors, officers,

senior management and employees of the Company for ensuring the Company immediately discloses all

price-sensitive information in compliance with the Listing rules and Corporations Act relating to continuous

disclosure.

The Policy may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Principle 6 – Respect the rights of security holders

Recommendation 6.1 – Information on website

The Company has a website, simondsgroup.com.au, which includes a ‘Corporate Governance’ section where

information about the Company, including its corporate governance information can be accessed.

Recommendation 6.2 – Investor relations program

The Company has adopted a Continuous Disclosure & Communications Strategy Policy governing its approach

to communicating with its shareholders, market participants and other stakeholders.

This policy specifically includes:

7

The approach to briefing media, investors and analysts; and

The approach to communicating with shareholders about the Company’s financial performance and

business strategy via shareholder meetings.

Simonds Group Limited provides a copy of the annual report to all shareholders who have requested to

receive a hard copy, but encourages its investors to access the annual report online. The annual report

contains relevant information about the Company’s operations during the year, changes in the state of affairs

and other disclosures required by the Corporations Act. The half year report contains summarised financial

information and a review of Simonds Group operations during the period. The Simonds Group Limited

corporate website provides all shareholders and the public access to our announcements to the ASX, and

general information about Simonds Group Limited and our business.

Recommendation 6.3 – Facilitating participation at meetings of security holders

The Company views the AGM as an important forum for two-way communication between the Company and

its shareholders. The AGM is an opportunity for shareholders to hear from and put questions to the Board,

management and the external auditor. Shareholders who are unable to attend the AGM to exercise their right

to ask questions about, or make comments on, the management of the Company, are encouraged to provide

questions or comments ahead of the AGM.

Recommendation 6.4 – Facilitating electronic communications

The Company provides (and encourages) shareholders with the option to receive communications from, and

send communications to, the Company and the Share Registry electronically, for reasons of speed,

convenience, cost and environmental considerations.

Annual reports are provided electronically via the Company’s website, under the ‘ASX Announcements’

section, unless a Shareholder elects to receive a printed copy. (simondsgroup.com.au/announcements)

Announcements made by the Company to the ASX are made available on the Company’s website, under the

ASX Announcements section and on the ASX website.

Shareholders are able to access information relevant to their holding via the Share Registry website

boardroomlimited.com.au.

Principle 7 – Recognise and manage risk

Recommendation 7.1 – Risk management framework

The Company views effective risk management as a key component to achieving and maintaining its

operational and strategic objectives. The identification and management of Simonds Group’s risks are an

important priority of the Board.

The Company’s risk management is assessed and managed by the Audit and Risk Management Committee

and governed by the Audit and Risk Management Committee Charter, which may be viewed at

simondsgroup.com.au. Refer also Recommendation 4.1.

8

Simonds Group Limited has in place a Risk Management Framework whereby management is responsible for

active identification of risks and implementation of mitigation measures, and may be required to report as to

its adherence to policies and guidelines approved by the Board for the management of risks.

Management reports regularly on risk management to the Board and the Audit and Risk Management

Committee, identifying the Group’s material risks and the extent to which the Company’s ongoing risk

management program effectively identifies, manages, tests and addresses risk management issues.

The Company’s Risk Management Framework encompasses all facets of the business, including the following

key risk categories: Governance, Financial, Operational, Compliance and Strategic.

Recommendation 7.2 – Annual risk review

Simonds Group Limited’s risk management framework is reviewed at least annually by the Audit and Risk

Committee and was reviewed during the reporting period.

Recommendation 7.3 – Internal audit

The Company does not have a separate internal audit function. One of the responsibilities of the Audit and

Risk Management Committee is to evaluate compliance with the Company’s risk management and internal

control processes.

The Board has received written assurances from management as to the effectiveness of the Company’s

management of its material business risks and internal controls. The Chief Executive Officer and Chief

Financial Officer have provided written assurance that the declaration provided in accordance with section

295A of the Corporations Act is founded on a sound system of risk management and internal control and that

the system is operating effectively in all material respects in relation to the financial reporting risks.

Recommendation 7.4 – Sustainability risks

As part of the Risk Management Framework, the Company has identified the key risk categories which include

Governance, Financial, Operational, Compliance and Strategic. Material business risks are then identified

within each category. A number of economic, environmental and social sustainability risks have been

identified as part of the risk assessment process and are managed in line with the Risk Management Policy.

A summary of key risks is included in the Directors Report of the FY2016 Appendix 4E and Financial Report

lodged at ASX on 30 August 2016.

Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1 – Remuneration committee

Please refer to Recommendation 2.1 for details of the Nomination and Remuneration Committee.

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Recommendation 8.2 – Remuneration policy

Details of the Company’s remuneration policies and practices are included in the Remuneration Report within

the FY2016 Appendix 4E and Financial Report lodged at ASX on 30 August 2016.

Details of compensation for Non-Executive Directors, Executive Directors and other senior executives are also

separately disclosed within the Remuneration Report.

Recommendation 8.3 – Policy on hedging equity incentive schemes

Simonds Group has an employee equity plan in place, which includes equity incentives. The rules of the plan

prohibit participants from entering into transactions or arrangements, including by way of derivatives or

similar financial products, which limit the economic risk of holding unvested awards under that plan.

Documents

Appendix 4G Key to Disclosures Corporate Governance ...simondsgroup.com.au/images/Section/Media/135/size2/... · Date: 31 October 2016 Name of Director or Secretary authorising lodgement: